BitMine stock: why BMNR shares are ripe for a rebound

BitMine's stock price has remained under pressure in the past few months as demand for Digital Asset Treasury (DAT) companies waned and the Ethereum price crashed from a record high of nearly $5,000 to the current $1,800.

BitMine's stock price technical analysis 

The daily timeframe chart shows that the BMNR stock price has retreated in the past few months, moving from a record high of $160 in July to the current $20.

A closer look shows that it has formed a falling wedge pattern, which is made up of two descending and converging trendlines.

In most cases, this pattern normally leads to a strong bullish breakout, especially when the two lines are nearing their convergence.

The two lines of the Percentage Price Oscillator (PPO) have made a bullish crossover, while the Relative Strength Index (RSI) has moved from the oversold level of 25 to the current 40. It is now pointing upwards and nearing the key point at 50.

Therefore, the most likely scenario is where the stock bounces back later this year, potentially to the key resistance level at $35, its highest level on January 14.

A move above that level will point to more gains, potentially to the key resistance level at $50.

On the other hand, a drop below the lower side of the descending channel will invalidate the bullish outlook and point to more gains.

Ethereum has strong fundamentals 

The other main catalyst for the BMNR stock price is that Ethereum has some of the best fundamentals, which will help it in its recovery.

Data compiled by Nansen shows that Ethereum, despite its history and size, has become one of the fastest-growing crypto projects.

The data showed that, despite the ongoing crypto winter, Ethereum handled over 70 million transactions in the last 30 days, an 18% increase.

Also, the number of active addresses jumped to over 14.6 million, while its fees soared by 100% to $20 million. 

More data shows that the total value locked (TVL) in its decentralised finance (DeFi) ecosystem has jumped to a record high in ETH terms.

Also, the total amount in the real-world asset (RWA) tokenisation industry has soared to over $17 billion, a trend that may continue in the coming months.

Ethereum has become the most dominant player in the stablecoin industry, where it is constantly handling over $1 trillion a month, beating other networks like Solana and Arbitrum.

Meanwhile, the supply of Ethereum tokens in exchanges has continued falling and is at the lowest level in years, a sign that accumulation is going on.

Most importantly, as Tom Lee noted recently, Ethereum always bounces back from its major drawdowns.

In a report, he noted that Ethereum has had eight major drawdowns since 2018, and it always experiences a V-shaped recovery.

BitMine is a cash flow machine with no debt 

The other major catalyst for the BitMine stock price is that it has the potential to become a cash flow machine once it completes the Ethereum accumulation process. 

It is making millions of dollars in staking and by investing its cash balances to government bonds. Most importantly, unlike Strategy, BitMine does not carry any debt.

At the same time, the company has started to invest in some companies, a move that has transformed it into a giant venture capital company.

For example, it recently invested in Beast Industries, a position that may become big in the future.

BitMine recently won a major vote to increase its authorised shares to 5 billion, a move that will provide it with funds to invest in more companies in the future.